Financials led the index higher, with the Commonwealth Bank of Australia posting the biggest gains of 1.2 per cent.

BHP Billiton plumbed 0.9 per cent after reporting a 43 per cent drop in half-year profits, its worst half-year slide in more than a decade but in line with market expectations. The company said CEO Marius Kloppers will step down in May and be replaced by Andrew Mackenzie.

"[The Australian market's] hunt for yield doesn't seem to run out of steam with financials and certain staples names doing nicely."

The S&P/ASX 200 index finished the day 16.8 points higher at 5,098.7. On Tuesday, the market closed at its highest level since September 3, 2008. The Australian market has risen nearly 10 per cent this year on receding euro zone and US fiscal concerns, while a relatively strong earnings season has amplified those gains.

"The tide continued to push higher for equity markets across Asia today, with solid leads from Europe and the US enough to keep traders in a buying frame of mind," said Tim Waterer, senior trader at CMC Markets.

Retailers also supported the market. Harvey Norman jumped 1.3 per cent while David Jones climbed 0.8 per cent and rival Myer was up 0.7 per cent. Food retailers Woolworths jumped 2.2 per cent while rival Wesfarmers rose 0.9 per cent.

Leighton Holdings soared 3.6 per cent. The company is in negotiations to sell 70 per cent of its telco assets.

Seven West Media crashed 7.1 per cent after reporting a half year net loss of $109.3 million.